Question

4 On December 31, 2021, the end of the fiscal year, Revolutionary Industries completed the sale of its robotics business for $12.6 million The robotics business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8.8 million. The income from operations of the segment during 2021 was $5.8 million, Pretax income from continuing operations for the year totaled $13.8 million. The income tax rate is 25%. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations to fore income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example, $4,000,000 rather than $4.) Book Print erences REVOLUTIONARY INDUSTRIES Partial Income Statement For the Year Ended December 31, 2021 Income from continuing operations before income taxes Income from continuing operations Discontinued operations: Income (loss) on discontinued operations Net Income (loss) Prey. Score answer > 4 of 8 : S е Chapter 2 slides - pptx Ppt E O RI here to search

Answer 1

REVOLUTIONARY INDUSTRIES
Partial Income Statement
For the Year Ended December 31, 2021
Income from continuing operations before income taxes		$13,800,000
Income tax expense                                                            [$13,800,000 x 25%]		($3,450,000)
Income from continuing operations                           [$13,800,000 - $3,450,000]		$10,350,000
Discontinued operations:
Income from operations of discontinued component        [Refer Working note]	$9,600,000
Income tax expense                                                          [$9,600,000 x 25%]	($2,400,000)
Income (loss) on discontinued operations                          [$9,600,000 - $2,400,000]		$7,200,000
Net income (loss)                                                              [$10,35,0000 + $7,200,000]		$17,550,000

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Working note - Computation of Income from operations of discontinued component (robotics)
Sale value of the discontinued segment	$12,600,000
Book value of the discontinued segment	$8,800,000
Gain on disposal of discontinued segment                    [$12,600,000 - $8,800,000]	$3,800,000
Income from operations of the discontinued segment	$5,800,000
Income from operations of discontinued component    [$3,800,000 + $5,800,000]	$9,600,000